Latest news with #Caixin
Khaleej Times
12 hours ago
- Business
- Khaleej Times
China factory activity hits lowest since 2022, survey shows
Chinese factory activity hit a more than two-year low in May, a closely watched survey showed Tuesday, as a detente in Beijing's trade war with Washington was offset by ongoing domestic problems in the world's number two economy. China and the United States agreed last month to temporarily halt most tit-for-tat tariffs on each other's goods, providing some much-needed relief to global markets. But the standoff has still piled further pressure on China's economy, which already faced a long-running real-estate crisis, sluggish consumption and high levels of local government debt. The Caixin Purchasing Managers' Index, independently calculated by S&P Global and Chinese business outlet Caixin, fell to 48.3 in May, well below the 50-point threshold separating expansion from contraction. The figure was the lowest since September 2022 and well below the 50.4 seen in April. It was also sharply off the 50.7 forecast in a Bloomberg survey of economists. "The surprisingly sharp fall... means that the survey data now point to a loss of economic momentum last month," said Zichun Huang, China economist at Capital Economics. "Domestic headwinds (are) more than offsetting the boost from the US-China trade truce," she said. Wang Zhe, senior economist at Caixin Insight Group, said the slowdown was linked to "sluggish external demand, which fell for a second straight month". The country should target effective measures to boost domestic demand by improving household incomes, Wang added. Official data from the National Bureau of Statistics on Saturday showed a less severe contraction in the factory sector last month. While the NBS figure focuses on large state-owned industrial groups, the Caixin index primarily surveys small and medium-sized enterprises. But in a positive sign, a business sentiment survey by S&P Global and Caixin showed a slight improvement in May after a record drop in April, thanks to expectations of stronger foreign trade through the rest of the year.
Business Times
15 hours ago
- Business
- Business Times
China's private factory gauge plunges to weakest since 2022
[BEIJING] China's manufacturing sector had its worst slump since September 2022, according to a private survey, as higher tariffs took a toll on smaller exporters despite a truce in the trade war with the US. The Caixin manufacturing purchasing managers' index fell to 48.3 in May from 50.4 in the prior month, according to a statement released by Caixin and S&P Global on Tuesday (Jun 3), well below the 50 mark separating expansion from contraction. The figure was below every estimate in a Bloomberg survey of analysts, whose median was 50.7. The results, based on a poll conducted May 12 to May 21, were far weaker than the official PMI reading released on Saturday, which showed manufacturing contracted less thanks to the reprieve on tariffs. The National Bureau of Statistics typically conducts its surveys between the 22nd and 25th of every month. The timing differences may have contributed to the discrepancy in the two data sets, according to economists at Goldman Sachs Group, since China and the US reached an agreement on May 12 to reduce tariffs for 90 days. 'Technical factors' in the survey, such as a smaller sample and different methodology for seasonal adjustments, may also help explain why it deviated from the official PMI, according to Bloomberg Economics. The two surveys cover different pool sizes, locations and business types, with the private one focusing on small and medium-sized firms in the non-state sector. The trade war started by President Donald Trump is rippling through industries across Asia and beyond, as US duties and trade uncertainty erode demand. Vietnam, Indonesia, Taiwan, Japan and South Korea all suffered a contraction in manufacturing activity last month – a downturn caused in large part by a drop in new export orders and production. US factory activity shrank in May for a third consecutive month. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'Manufacturing supply and demand declined, dragged by overseas demand,' Wang Zhe, senior economist at Caixin Insight Group, said in a statement. 'The downward pressure on the economy has significantly intensified compared to preceding periods.' 'The May reading on the Caixin manufacturing PMI, which showed a surprise – and sharp – drop into contraction could be another misleading signal,' said Chang Shu and Eric Zhu, economists for Bloomberg Economics. 'It's hard to explain it otherwise – high frequency-indicators point in the other direction.' The divergence between the private and official PMI numbers also highlights the disproportionate damage to small- and medium-sized Chinese companies from the trade war, according to Becky Liu, head of China macro strategy at Standard Chartered Bank. The impact from US tariffs 'is mostly on smaller exporters with a hit to employment, while a direct impact on large corporations and overall exports will likely be more limited given their much more diversified business profiles,' Liu said. 'The additional slowdown in the global economy – due to policy uncertainties in the US on top of trade policies – will further dent external demand, and will likely lead to some further weakness in SMEs' exports ahead.' The surprise deterioration in manufacturing highlights the need for more support from the government to strengthen consumption and offset shocks to external demand. At the height of tensions with the US last month, the central bank delivered cuts to its policy rate and the reserve requirement ratio, which determines the amount of cash lenders must set aside in reserves. Chinese stocks rose after the weak data on Tuesday reignited hopes of more stimulus. The onshore CSI 300 Index gained 0.5 per cent as of the mid-day break, while a gauge of Chinese stocks listed in Hong Kong jumped as much as 1.8 per cent. 'Boosting domestic demand should be grounded in improving household incomes,' Caixin Insight Group's Wang said. 'Feasible and effective measures must be taken to improve the employment environment, strengthen social security, raise household disposable income, improve market expectations, and ultimately drive a continued economic recovery.' The picture painted by the more export-oriented Caixin survey offers another glimpse of how factories adjusted in the initial aftermath of the trade ceasefire. Although the US lowered the average rate of tariffs to roughly 40 per cent following last month's talks in Geneva, that level is still enough to reduce American imports from China by around 70 per cent over the medium term, according to estimates from Bloomberg Economics. A renewed fall in new orders accompanied a decline in manufacturing output, according to the PMI report. Companies reduced their purchasing activity and cut staffing levels, although sentiment towards future output improved, it said. The prospects for manufacturing in the months ahead are still in question given an uncertain export outlook, and especially as tensions rose again in recent days between the world's two biggest economies. The economy remains under pressure from sluggish domestic demand. 'The trade environment remains highly uncertain,' said Raymond Yeung, chief economist for Greater China at Australia & New Zealand Banking Group. 'The key remains on property, which is still sluggish with no sign of recovery.' BLOOMBERG
Arab Times
15 hours ago
- Business
- Arab Times
World shares are mostly higher after modest gains put Wall St close to records
WASHINGTON, June 3, (AP): Shares were mostly higher Tuesday in Asia after US stock indexes drifted closer to records, while oil prices extended gains. The futures for the S&P 500 and the Dow Jones Industrial Average fell 0.3%. Markets in China advanced despite a report showing manufacturing activity slowed in May, even after China and the US paused tariff hikes to allow time for talks. In early European trading, Germany's DAX climbed 0.3% to 23,996.47, while the CAC 40 in Paris edged 0.2% higher to 7,747.72. Britain's FTSE 100 was up less than 0.1% at 8,779.65. Adding to uncertainty in a region already enduring war in Ukraine, Poland elected Karol Nawrocki, a conservative historian and staunch nationalist, as its next president in a closely watched vote that signaled a resurgence of right-wing populism in the heart of Europe. Nawrocki has voiced support for Ukraine's defense against Russian aggression, but does not back Ukrainian membership in NATO and has questioned the long-term costs of aid - particularly support for refugees. The survey of Chinese purchasing managers, or PMI, by the financial media group Caixin showed factory output, new export orders, purchasing activity and staffing all declined last month. Incoming new work contracted at the quickest pace in over two-and-a-half years. the report said. The situation is "a body blow to the backbone of China's economy: small and mid-sized exporters now caught in a brutal vice grip between faltering global demand and a Washington-led tariff regime that's more carrot-and-stick diplomacy than ceasefire,' Stephen Innes of SPI Asset Management said in a commentary. However, as is often the case, investors shrugged off the bad news with the assumption that it might raise the likelihood of more market support from Beijing. Hong Kong's Hang Seng jumped 1.5% to 23,501.55, while the Shanghai Composite index rose 0.4% to 3,361.98. Tokyo's Nikkei 225 edged 0.1% lower to 37,446.81. In Australia, the S&P/ASX 200 climbed 0.6% to 8,466.70. In Taiwan, the Taiex gained 0.6%, while India's Sensex lost 0.5%. Beijing and Washington dialed back trade friction slightly as the US extended exemptions for tariffs on some Chinese goods, including solar manufacturing equipment, that US industries rely on for their own production.
Telegraph
16 hours ago
- Business
- Telegraph
China's factories suffer biggest slump in three years amid Trump tariffs
Chinese factories suffered their sharpest fall in new orders since September 2022, a closely watched survey showed, as bosses grappled with Donald Trump's tariff war. Manufacturing activity hit a nearly three-year low in May, according to the Caixin China General Manufacturing PMI. The reading of 48.3 signalled an unexpected contraction in the powerhouse of China's economy. Zichun Huang of Capital Economics said: 'The surprisingly sharp fall... means that the survey data now point to a loss of economic momentum last month. 'Domestic headwinds (are) more than offsetting the boost from the US-China trade truce.' China and the United States agreed last month to temporarily halt most tit-for-tat tariffs on each other's goods, providing some much-needed relief to global markets. However, that agreement has been thrown into doubt after President Trump and Beijing accused each other of violating the terms of the deal in recent days. Wang Zhe, senior economist at Caixin Insight Group, said the slowdown was linked to 'sluggish external demand, which fell for a second straight month'. Read the latest updates below.
RTHK
17 hours ago
- Business
- RTHK
Mainland factory activity hits 32-month low: survey
Mainland factory activity hits 32-month low: survey The Caixin index primarily surveys small and medium-sized enterprises. File photo: Reuters China's factory activity in May fell to its lowest in 32 months, a private-sector survey showed on Tuesday, suggesting US tariffs are now starting to directly hurt the manufacturing superpower. The Caixin/S&P Global manufacturing PMI fell to 48.3 from 50.4 in April, missing analysts' expectations in a Reuters poll and marking the first contraction since September last year. The 50-mark separates growth from contraction. It was also the lowest reading since September 2022. "The surprisingly sharp fall... means that the survey data now point to a loss of economic momentum last month," said Huang Zichun, China economist at Capital Economics. "Domestic headwinds [are] more than offsetting the boost from the US-China trade truce," she said. The result is broadly in line with China's official PMI released on Saturday that showed factory activity fell for a second month. Wang Zhe, senior economist at Caixin Insight Group, said the slowdown was linked to "sluggish external demand, which fell for a second straight month". Beijing should target effective measures to boost domestic demand by improving household incomes, Wang added. A US federal appeals court temporarily reinstated the most sweeping tariffs, a day after a trade court ruled that President Donald Trump had exceeded his authority in imposing the duties and ordered an immediate block on them. Two weeks after breakthrough negotiations that resulted in a temporary truce in the trade war between the world's two biggest economies, US Treasury Secretary Scott Bessent said on Thursday the talks are "a bit stalled". Premier Li Qiang last week said the country is mulling new policy tools, including some "unconventional measures", which will be launched as the situation evolves. According to the Caixin survey, new export orders shrank for the second straight month in May and at the fastest pace since July 2023. Producers said the US tariffs restrained global demand. That dragged down overall new orders to the lowest since September 2022. Factory output, meanwhile, contracted for the first time since October 2023. (Reuters/AFP)
